When computer is purchased for cash, what will be the impact on accounting equation?

Capital & Assets increases

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Liabilities & Assets increases

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Liabilities & Assets decreases

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No impact

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Solution

The correct option is D
No impact

When a computer is purchased, computer account increases and cash account decreases. Since both are assets, there wont be any impact on accounting equation

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Similar questions

Give an example for each of the following types of transaction.
(i) Increase in one asset, decrease in another asset.
(ii) Increase in asset, increase in liability.
(iii) Increase in asset, increase in owner's capital.
(iv) Decrease in asset, decrease in liability.
(v) Decrease in asset, decrease in owner's capital.
(vi) Decrease in liabilities, increase in owner's capital.
(vii) Increase in one liability, decrease in another liability.
(viii) Increase in liabilities, decrease in owner's capital.

Q. The accounting equation i.e. Assets = Capital + liabilities is based on _________________.

Q. Suppose P start a business with

R s . 50, 000

cash and then buys furniture from F.F. Co. on credit for

R s . 2, 000

. Now, the accounting equation

A s s e t s = C a p i t a l + L i a b i l i t i e s

will be __________________.

Q. All increases or decreases in the value of assets and liabilities are recorded in account.

Q. Give one example of each of the following transactions:
(i) Increase in an asset and a liability.
(ii) Decrease in an asset and a liability.
(iii) Increase in assets and capital.
(iv) Decrease in assets and capital.

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When computer is purchased for cash, what will be the impact on accounting equation?

The correct option is D No impact When a computer is purchased, computer account increases and cash account decreases. Since both are assets, there wont be any impact on accounting equation

The correct option is D
No impact

When a computer is purchased, computer account increases and cash account decreases. Since both are assets, there wont be any impact on accounting equation